Microvision MVIS Stock News

For the past couple of trading sessions, Microvision, Inc. (NASDAQ: MVIS) has been tumbling in the market. Today, that movement is continuing with the stock down more than 25%. With no news out, many are wondering why the stock is falling.

While there’s a reason for the declines, they won’t last long. Moreover, there’s a strong chance that this company is going to be taken over. So, buying on the declines may be an incredibly strong move. Here’s what’s happening:

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Why MVIS Stock Is Declining

We’ve all heard the old addage, “What goes up must come down.” Well that seems to be the case for Microvision. Late last week and early this week, the stock gained in multiples over the course of a few trading sessions as rumors spread that it would be taken over by Microsoft.

The rumor led to a short squeeze, sending the stock through the roof!

However, knowing that most rumors in the market prove to be false, and not hearing anything from MVIS or MSFT, many have lost faith in the idea of a takeover, leading to a bit of a correction in the value of the stock.

Noentheless, I’m here to say that if you’ve lost faith, you’ve moved too soon.

If There Was Ever A True Market Rumor, This Is Likely It

The rumor that we’re speaking of today surrounds a product called HoloLens, a mixed reality glasses product offered up by Microsoft. However, much of the technology used in the product is owned by MVIS.

As a result, every time someone buys a HoloLens product from Microsoft, they have to turn around and hand royalties to Microvision. Not a bad deal for MVIS right? Well, that’s not enough to say that an acquisition will happen, but a recent series of events is.

First and foremost, MVIS was having a hard time meeting the demand for specific components of the HoloLens. As a result, the company recently announced that one of its larger companies have taken over component production.

At this point, I was sure it was Microsoft, but the company didn’t name this mystery customer. Nonetheless, Microsoft had the money, tech, and all capabilities required to streamline component production, and soon enough, it was confirmed in a round about way.

In a press release, the United States Army essentially thanked Microsoft for streamlining the production of these components. Of course, this solidified my view that the mystery partner was indeed Microsoft.

However, the story goes deeper. Recently, we’ve watched as key MVIS employees jump ship and move over to MSFT. In particular, senior researchers have made the move. So, not only is Microsoft helping with production, they are taking some of the company’s leading employees.

Not to mention, Mcirovision has been dealing with some serious pain lately. As a result, the CEO of the company recently announced that they would be looking into strategic alternatives, including, but not limited to merger and acquisition transactions.

Now, we’re seeing delays indicative of a deal in the works. The company said that it is not going to hit product and timeline goals that were negotiated under a $100 million deal announced in February. The company also said that it would be delaying an OEM product launch that was expected in 2020.

There are several reasons that these types of delays can happen, but given all of the evidence, the delays, in my opinion, are likely associated with a deal in the works.

When we put two and two together, we get four. In this case, the first two is Microsoft’s goal to make HoloLens a overwhelmingly popular product and the second is Microvision’s goal to bring value to investors. When we put those goals together with all of the evidence outlined above, we clearly see that an acquisition is likely on the horizons.

The Bottom Line

Microsoft has plenty of money to fund this acquisition and they have everything to gain from moving forward with this type of transaction. At the same time, all signs seem to be pointing to a deal in the works. All in all, buying the dip has the potential to yield serious gains if and when a deal does happen.

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6 COMMENTS

    • Rumors move the market and savvy traders want to know what’s going on so that they can exploit these moves for profits. Thanks for reaching out.

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